LendingTree, Inc. (NASDAQ: TREE)

Sector: Financial Services Industry: Financial Conglomerates CIK: 0001434621
Market Cap 515.56 Mn
P/B 3.89
P/E 36.42
P/S 0.49
ROIC (Qtr) 8.48
Div Yield % 0.00
Rev 1y % (Qtr) 18.02
Total Debt (Qtr) 444.35 Mn
Debt/Equity (Qtr) 3.36
Add ratio to table...

About

LendingTree, Inc., a leading online consumer platform (ticker symbol: TREE), operates in the financial services industry, connecting consumers with a wide range of financial services providers. The company's primary business activities involve empowering consumers to shop for financial services in a similar manner to how they would shop for airline tickets or hotel stays, by comparing multiple offers from a nationwide network of partners in one simple search. LendingTree's operations span across the United States, with a comprehensive network of...

Read more

Investment thesis

Bull case

  • Healthy cash reserves of 68.58M provide 17.42x coverage of short-term debt 3.94M, demonstrating strong liquidity position and minimal refinancing risk.
  • Robust free cash flow of 63.06M exceeds capital expenditure of 9.75M by 6.47x, indicating strong organic growth funding capability.
  • Operating cash flow of 72.81M fully covers other non-current liabilities 6.24M by 11.67x, showing strong long-term stability.
  • Robust tangible asset base of 339M provides 4.35x coverage of working capital 77.89M, indicating strong operational backing.
  • Operating cash flow of 72.81M provides strong 11.97x coverage of tax liabilities 6.08M, showing excellent fiscal position.

Bear case

  • Operating cash flow of 72.81M barely covers its investment activities of (9.75M), with a coverage ratio of -7.47, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (9.75M) provide weak support for R&D spending of 47.61M, which is -0.20x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • The company's operating cash flow of 72.81M shows concerning coverage of stock compensation expenses of 26.59M, with a 2.74 ratio indicating potential earnings quality issues.
  • Free cash flow of 63.06M represents just -0.68x of debt issuance (92.08M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Operating earnings of 64.03M show weak coverage of depreciation charges of 21.37M, with a 3 ratio indicating high capital intensity and potential reinvestment needs.

Peer comparison

Companies in the Financial Conglomerates
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 IX Orix Corp 40.16 Bn 13.32 2.00 43.12 Bn
2 VOYA Voya Financial, Inc. 18.63 Bn 31.13 2.13 3.21 Bn
3 FRHC Freedom Holding Corp. 6.65 Bn 2,496.76 3.24 2.17 Bn
4 HTH Hilltop Holdings Inc. 3.22 Bn 7.52 1.58 0.96 Bn
5 TREE LendingTree, Inc. 0.52 Bn 36.42 0.49 0.44 Bn
6 RILY BRC Group Holdings, Inc. 0.20 Bn 0.94 0.23 1.51 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.22 0.57
EV to Cash from Ops. EV/CFO 12.69 1.32
EV to Debt EV to Debt 2.08 3.11
EV to EBIT EV/EBIT 14.43 11.84
EV to EBITDA EV/EBITDA 11.28 5.50
EV to Free Cash Flow [EV/FCF] EV/FCF 14.65 2.85
EV to Market Cap EV to Market Cap 1.79 2.45
EV to Revenue EV/Rev 0.87 2.03
Price to Book Value [P/B] P/B 3.89 1.99
Price to Earnings [P/E] P/E 36.42 431.02
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 5.44
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 9.60
Dividend per Basic Share Div per Share (Qtr) 0.00 0.46
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 32.70
Interest Coverage Int. cover (Qtr) 1.35 2.27
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 11.35 1,831.15
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -29.15 17.12
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -2.11
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 289.80 65.96
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 72.99 21.08
EBIT Growth (1y) % EBIT 1y % (Qtr) 344.44 85.57
EBT Growth (1y) % EBT 1y % (Qtr) 149.97 41.73
EPS Growth (1y) % EPS 1y % (Qtr) 139.55 51.48
FCF Growth (1y) % FCF 1y % (Qtr) 12.80 20.60
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 37.89 10.65
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.39 0.37
Cash Payout Ratio Cash Payout (Qtr) 0.00 -0.04
Cash Ratio Cash Ratio (Qtr) 0.38 0.06
Current Ratio Curr Ratio (Qtr) 1.43 0.24
Debt to Equity Ratio Debt/Equity (Qtr) 3.36 0.28
Interest Cover Ratio Int Coverage (Qtr) 1.35 2.27
Times Interest Earned Times Interest Earned (Qtr) 1.35 2.27
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 8.10 18.20
EBIT Margin % EBIT Margin % (Qtr) 6.05 719.79
EBT Margin % EBT Margin % (Qtr) 1.58 12.61
Gross Margin % Gross Margin % (Qtr) 96.20 73.67
Net Profit Margin % Net Margin % (Qtr) 1.30 10.10